Jim Fossel: Democrats’ promised tax ‘cuts’? A shell game

For eight years, Democrats constantly bemoaned the LePage administration’s cuts to revenue sharing, the portion of taxes collected by the state that’s distributed to cities and towns.

They – along with local officials, school administrators and teachers unions – claimed that the revenue-sharing cuts unfairly burden property taxpayers with the lion’s share of education spending.

Rather than working with Republicans to further cut income taxes, Democrats continually insisted that they would rather increase revenue sharing so cities and towns all over the state would be able to cut property taxes.

Now, we’ve just learned that all of that was mere smoke and mirrors. In what should have been the least surprising news of the year, Maine Sunday Telegram Staff Writer Noel K. Gallagher wasn’t able to locate a school district that planned to use the Mills administration’s increased revenue sharing to cut property taxes or reduce overall spending. According to the school districts Gallagher contacted, this was because their costs continued to rise, so the state money would be directed to cover new expenses.

In other words, rather than cut spending, now that they’re getting extra money from the state, they’re simply going to … well, spend it.

Democrats may well argue that shifting any increased spending onto the state’s ledgers will help property taxpayers, as at least then taxes won’t be raised. That may actually end up being true in some districts, but in other districts administrators could end up spending the increased money from the state and still demanding additional money, leading to more property tax hikes. Even in the places where it is true, it rests on the assumption that those spending increases were absolutely vital and would have occurred whether or not the state increased funding.

Like so many other parts of Gov. Mills’ budget, that’s a precarious assumption. Districts could also have cut spending to avoid property tax increases and gotten by without the additional money from the state. Either way, it’s certainly not the property tax cut we were promised.

That’s no surprise, really; the idea that the government spending more money was going to somehow lead to tax cuts never really made much sense. It’s magical thinking that allows Democrats to funnel more funding toward one of their major constituencies – teachers unions – while simultaneously promising that they could cut taxes, usually a Republican priority. Since Democrats never offered any specific requirements to ensure that increased funding would help reduce property taxes, it was always clear that it was a shell game. That should be obvious any time a politician offers some complex scheme for cutting taxes: They’re just spouting empty promises designed to win your vote. That’s equally true whether it’s a legislative candidate promising that more spending will lead to tax cuts or a governor promising to cut taxes by raising some and expanding others.

No matter what level of government they’re running for, whether it’s selectman or president, the formula for how to cut taxes isn’t complex and it isn’t a magical mystery. It’s really pretty simple: If you cut spending enough, then you can cut taxes. Just as cutting taxes won’t help reduce the deficit, increasing spending won’t help cut taxes.

By campaigning on the latter, Maine Democrats discovered their own version of supply-side economics – promising tax cuts without having to make any of the hard decisions about spending. It’s no wonder they did so well in the November elections – everybody finds the idea of getting something for nothing appealing. Unfortunately, in government as in the rest of life, it’s just not a viable fiscal strategy.

Here in Maine, we have a chance to correct this mistake in the coming weeks, but it’s not by electing new people to the Legislature. All over the state, school boards are working on their budgets, holding public hearings to gather input. If you want lower property taxes, go to these meetings and make yourselves heard. Don’t just show up and demand cuts, though – prepare yourself by taking a close look at your school district and municipal budgets ahead of time, and arrive with specific proposals.

It’s also town meeting season, which means many towns are holding local elections. If someone comes knocking on your door who’s running for selectman or school board, ask them what their plan is to cut taxes and spending. If they don’t have one, they must think local tax levels are just fine or they’re not prepared for the job. Either way, if you wish your property taxes were lower, you ought to find someone else to vote for.

Jim Fossel, a conservative activist from Gardiner, worked for Sen. Susan Collins. He can be contacted at:

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